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» Countrywide Tightens Lending Guidelines for Miami, Las Vegas, and Phoenix - Housing Doom Housing Bubble Blog

A Countrywide e-mail:

"Hello everyone. Here is another change that will certainly have an impact on your files currently submitted if they were not underwritten and approved as of today. This will affect any file that used the max ltv/cltv guideline on any given property. A simple example is, if you submitted a loan and the max allowable guideline for that program states 100%cltv is allowed, and you submitted as 100% cltv, the loan will be approved but only 95% will be made available. The flip side of this is, if the max allowable ltv/cltv allowed is 100% and you submitted at 95% you will be ok. Please contact me and understand that this is causing quite a bit of restructuring to occur. Thanks for your patience and understanding…

Effective immediately, we must follow the "Countrywide Soft Market" policy. This policy affects transactions in the following MSA’s (Metropolitan Statistical Area).
1- Miami , FL
2- Las Vegas , NV
3- Phoeniz , AZ
Note that an MSA is larger than just the city listed, it includes all the surrounding areas. (ie, for Las Vegas , it essentially includes all of Clark County and Pahrump). To determine if a property is in an MSA, go to Zip Code Database List - U.S. Zip Code Data Map - US Postal Code Demographics Database Listing and search by zip code.

Soft Market Policy
A soft market is an area that shows evidence of declining property values, an oversupply of property and/or a marketing time of more than six months. Following are the requirements for soft market areas:

· Should be treated more conservatively than stable or increasing markets.

· Appraisals must be carefully underwritten to ensure the value and marketability of the collateral property are valid and supported. The underwriter may request a field review of the appraisal, if it is felt that the market value might be overstated.

· The underwriter must reduce the maximum Loan-to-Value (LTV) and Combined Loan-to-Value (CLTV) ratios by 5% on any program when it is determined the property is located in a soft market area. For example:

o If the maximum allowable LTV on a given program is 95%, and the property is located in a soft market, the LTV should be reduced on the individual loan request to a maximum of 90%.

o If the maximum allowable CLTV on the program is 100%, the maximum CLTV in a soft market should be adjusted down to 95%.

Note: In addition to the three comparables normally required, prudent underwriting would suggest that at least one, preferably two comparable pending sales be required in order to validate the value as well as the market activity.
This policy will be enforced on any loans that were not underwritten prior to today, August 13th. As we continue to navigate through this challenging market, we must remain confident that these types of changes are being made to ensure we are well positioned to remain on top. In order to mimimize any service issue this may create, lets make sure we proactively communicate this to BPs that will be affected on loans currently in the pipeline ASAP. As we get more details, we will relay new information right away.
Thank you.

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Countrywide cut by Merrill; bankruptcy raised

Wed Aug 15, 2007

By Jonathan Stempel

NEW YORK, Aug 15 (Reuters) - Countrywide Financial Corp. (CFC.N: Quote, Profile, Research) could face bankruptcy if liquidity worsens, according to a Merrill Lynch & Co. analyst who downgraded the largest U.S. mortgage lender to "sell" from "buy."

Moderator cut: copyrights

continues at:

Countrywide cut by Merrill; bankruptcy raised | Banking & Financial | Reuters